ua777222
Topic Author
Posts: 2987
Joined: Mon Dec 22, 2003 11:23 am

Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 3:19 pm

DOW is currently down 250 points. As this bailout of Greece makes its way, the Euro has weakened and the dollar has grown stronger, but imports/export costs are causing a massive selloff today.
"It wasn't raining when Noah built the ark."
 
kappel
Posts: 1836
Joined: Thu Jul 14, 2005 6:48 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 3:23 pm

EU exports should benefit from this (Airbus won't be sad by a decline in the Euro), but it is a worrying trend, even moreso now that Spain and Portugal are slipping as well. For now, Spain is convinced they can turn it around themselves, let's hope so! Not only for the EU, but for Spain itself as well of course.
L1011,733,734,73G,738,743,744,752,763,772,77W,DC855,DC863,DC930,DC950,MD11,MD88,306,319,320,321,343,346,ARJ85,CR7,E195
 
User avatar
Aaron747
Posts: 8558
Joined: Thu Aug 07, 2003 2:07 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 3:29 pm

Quoting Kappel (Reply 1):
For now, Spain is convinced they can turn it around themselves, let's hope so! Not only for the EU, but for Spain itself as well of course.

Still small potatoes to what would happen with a run on the Japanese yen. Public debt is now at somewhere in the neighborhood of 190% of GDP, second only to Zimbabwe.  Wow!
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 3:44 pm

These daily swings aren't necessarily indications of a broader swing. If anything, it shows that investors aren't really sure which way the broader market is going, and are reacting quickly to any new news that comes across the wire. Remember, the Dow was up 143 yesterday.
Why grab a Heine when you can grab a Busch?
 
gatorfan
Posts: 305
Joined: Mon Oct 12, 2009 9:43 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 4:07 pm

I don't think we (the US) should be pointing fingers at anyone when it comes to fiscal responsibility.
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 4:27 pm

Quoting gatorfan (Reply 4):
I don't think we (the US) should be pointing fingers at anyone when it comes to fiscal responsibility.

The US Federal Government never even came close to defaulting on any loans, it's a completely different scenario. No point in holding back punches, Greece led themselves down this road.
Why grab a Heine when you can grab a Busch?
 
gatorfan
Posts: 305
Joined: Mon Oct 12, 2009 9:43 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 6:03 pm

Quoting newark777 (Reply 5):
The US Federal Government never even came close to defaulting on any loans, it's a completely different scenario. No point in holding back punches, Greece led themselves down this road.

Without in any way excusing or justifying Greece's actions - they made their bed.... The US gov't is completely bankrupt. The only difference is that we are too big to fail while Greece isn't. The US gov't will do what Greece can't do (because of its membership in the Euro) and that's allow our currency to devalue over time. That way the present value of the debt declines.

The US has absolutely no ability to pay its existing obligations. While we talk about a $14T debt, medicare and social security (for people who are alive today) already represent over $50T of future spending. Put that in perspective (that's about 12x what we spent in total this year as a federal gov't).
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 6:12 pm

Quoting gatorfan (Reply 6):
The US gov't is completely bankrupt.

Not bankrupt, in debt. If the US were to become insolvent, we would have much bigger issues, while Greece was so insolvent that they were headed towards missing a debt payment this May 19th. Nowhere near the same degree of seriousness.

Quoting gatorfan (Reply 6):
The US gov't will do what Greece can't do (because of its membership in the Euro) and that's allow our currency to devalue over time. That way the present value of the debt declines.

It's not so much that they can't let it devalue, it's just that the value of their Euro currency is tied into the value of all the nations collectively, of which Greece is a small percentage. Therefore Greece's issues don't have a significant impact on the currency valuation.

And no one lets or doesn't let a currency devalue, they are all market rates (except for China).

Quoting gatorfan (Reply 6):

The US has absolutely no ability to pay its existing obligations. While we talk about a $14T debt, medicare and social security (for people who are alive today) already represent over $50T of future spending. Put that in perspective (that's about 12x what we spent in total this year as a federal gov't).

While the US is in a serious debt problem long term, entitlement programs are not the same as issued debt. Saying we can't provide as much Social Security or Medicare in the future has fewer ramifications than if we were to not be able to pay back the debt held by other countries.
Why grab a Heine when you can grab a Busch?
 
IMissPiedmont
Posts: 6200
Joined: Wed May 23, 2001 12:58 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 6:28 pm

It's just a slowdown in the DJIA going back up to a ridiculously inflated, meaningless value.
The day you stop learning is the day you should die.
 
User avatar
OA260
Posts: 21113
Joined: Thu Nov 30, 2006 8:50 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 6:45 pm

Quoting ua777222 (Thread starter):
Thanks Greece! 

Parakalo   



Uploaded with ImageShack.us

Every cloud has silver lining ! Except ash clouds of course  
 
gatorfan
Posts: 305
Joined: Mon Oct 12, 2009 9:43 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 7:33 pm

Quoting newark777 (Reply 7):
Not bankrupt, in debt. If the US were to become insolvent, we would have much bigger issues, while Greece was so insolvent that they were headed towards missing a debt payment this May 19th. Nowhere near the same degree of seriousness.

First of all, national gov't can't be bankrupt. Bankruptcy is a statutory construct of the law where by a court of the sovereign discharges the debts of the debtor. Since the national gov't is the sovereign they themselves can't file bankruptcy - and sovereign immunity restricts a foreign court from adjudicating another sovereign in default.

But when used colloquially, a national bankruptcy is the equivalence of insolvency. The US is insolvent by any measure. We use accounting games to cover the insolvency. You want to see how insolvent the US is - we kiss China's ass and beg them not to try to sell all our bonds at once on the secondary market because the value of the bonds would drop so much that nobody would buy original issue bonds from the Treasury. Tell me, exactly how many weeks or months could the US go without rolling its debt?

But more so than that - we use one "credit card" to pay the other - using social security trust funds to pay current budget expenses while simply not accounting for cost of social security on budget (only current period expenditures).

Quoting newark777 (Reply 7):
It's not so much that they can't let it devalue, it's just that the value of their Euro currency is tied into the value of all the nations collectively, of which Greece is a small percentage. Therefore Greece's issues don't have a significant impact on the currency valuation.

They can't devalue because they don't set the value of the Euro. That's precisely the problem. When a country devalues its currency, it simply refuses to exchange it at a previously set price. Without exchange controls devaluation can't happen because the market already reflects the value of the local currency in units of foreign currency (that's what market exchange rates are).

If the Greeks tried to "devalue", all anyone holding Greek currency would have to do is go to another EU country and exchange their money for something else. There is no such thing as the value of a German Euro or a Greek Euro. They are all Euro's. To effect a devaluation the Greeks would first have to relaunch a currency, the drachma. Fix an exchange rate (thereby allowing debtors to pay their Euro denominated debts in the fixed numbers of Drachmas (sp?)). Of course that would cause immediate inflation for all imported goods.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 8:21 pm

Well the Obama and company should be happy as they have publicly called for a stronger dollar.
From the desert to the sea, to all of Southern California
 
deltaownsall
Posts: 1091
Joined: Fri Jul 13, 2001 3:25 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 8:22 pm

Quoting gatorfan (Reply 6):
The US gov't is completely bankrupt.

You don't present an unreasonable line of reasoning, but this statement in and of itself smacks of sensationalist youtube nonsense. Yes, according to multiple youtube videos, the U.S. has been "bankrupt" for years. Of course, there are myriad reasons why the US govt is in fact not insolvent, not the least of which being its exceptional status as the global hegemon (yes, the US still has the largest national economy and military by far) and the extraordinary room for error we've had since Bretton Woods, though they're certainly testing this position with their considerable fiscal irresponsibility. So no, the gov't is not 'bankrupt', but I agree that to think we're immune to an eventual downfall down the road (possibly within 10 years) if the gov doesn't get its act together is extremely foolhardy. On the other hand, despite some zealot nut PLA officers' fantasies, China will not be dumping a considerable amount of U.S. treasuries anytime soon. The reasoning here should be obvious.

Quoting Aaron747 (Reply 2):
Still small potatoes to what would happen with a run on the Japanese yen. Public debt is now at somewhere in the neighborhood of 190% of GDP, second only to Zimbabwe.

It's funny, you rarely hear about Japan's debt issues over here (in the mainstream at least). Everyone is so gaga over pontificating not if but when the United States will fall to its knees based on its debt that I feel like they'd be loathe to admit that other rich countries are in the same or possibly worse boat. Could someone explain how Japan's huge stock of money could affect tolerance for their huge debt ratio?
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 8:35 pm

The real question is .... who is buying today ? We want ups and downs ...right ?

I have been selling but we need a couple of down days to set up for buying back in .... what looks good ? Can google go back up to 625.00 was their a month ago ?
You dig the hole .. I fill the hole . 100% employment !
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 8:36 pm

Quoting gatorfan (Reply 10):
First of all, national gov't can't be bankrupt. Bankruptcy is a statutory construct of the law where by a court of the sovereign discharges the debts of the debtor.

Which is why I used insolvency in my post.

Quoting gatorfan (Reply 10):
But when used colloquially, a national bankruptcy is the equivalence of insolvency. The US is insolvent by any measure. We use accounting games to cover the insolvency. You want to see how insolvent the US is - we kiss China's ass and beg them not to try to sell all our bonds at once on the secondary market because the value of the bonds would drop so much that nobody would buy original issue bonds from the Treasury. Tell me, exactly how many weeks or months could the US go without rolling its debt?

But more so than that - we use one "credit card" to pay the other - using social security trust funds to pay current budget expenses while simply not accounting for cost of social security on budget (only current period expenditures).

No, insolvency is not being able to pay your debts. If you can pay your debts, you may still be in trouble, but not insolvent. Governments are tricky, because they play by different rules than businesses.

Bottom line, though, is that Greece was close to default, while the US is not.

Quoting gatorfan (Reply 10):

They can't devalue because they don't set the value of the Euro. That's precisely the problem. When a country devalues its currency, it simply refuses to exchange it at a previously set price. Without exchange controls devaluation can't happen because the market already reflects the value of the local currency in units of foreign currency (that's what market exchange rates are).

If the Greeks tried to "devalue", all anyone holding Greek currency would have to do is go to another EU country and exchange their money for something else. There is no such thing as the value of a German Euro or a Greek Euro. They are all Euro's. To effect a devaluation the Greeks would first have to relaunch a currency, the drachma. Fix an exchange rate (thereby allowing debtors to pay their Euro denominated debts in the fixed numbers of Drachmas (sp?)). Of course that would cause immediate inflation for all imported goods.

No one is debating that, thanks for the ECO 101 lesson.

Quoting LAXintl (Reply 11):
Well the Obama and company should be happy as they have publicly called for a stronger dollar.

In the long term, you want a stronger dollar. A boost to exports is just a temporary benefit to the weakening of the currency.

Quoting deltaownsall (Reply 12):
Yes, according to multiple youtube videos, the U.S. has been "bankrupt" for years.

Before everyone starts throwing these terms around more:

Bankrupt: Court declares a person or company cannot repay its debt.
Insolvent: A person or company is in a state in which it cannot repay its debt.
Default: When a person, company, or government entity does not deliver a debt payment.
Why grab a Heine when you can grab a Busch?
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 8:44 pm

Quoting AGM100 (Reply 13):
The real question is .... who is buying today ?

You would be shocked at how much trading these days is electronic, based on algorithms.

Quoting AGM100 (Reply 13):
We want ups and downs ...right ?

High volatility is good for a trader; better chance of making a profit. Lower volatility is safer, but more inclined to the buy and hold mentality.

Quoting AGM100 (Reply 13):
I have been selling but we need a couple of down days to set up for buying back in

Chasing the market is always dangerous, but I don't know how much experience you have.
Why grab a Heine when you can grab a Busch?
 
deltaownsall
Posts: 1091
Joined: Fri Jul 13, 2001 3:25 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 8:55 pm

Quoting newark777 (Reply 14):
Before everyone starts throwing these terms around more:

Bankrupt: Court declares a person or company cannot repay its debt.

that's why it was in quotes.  
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 8:57 pm

Quoting newark777 (Reply 15):
Chasing the market is always dangerous, but I don't know how much experience you have.

Always good advise newark.... I tend to buy units in my long term portfolio as they drop below a limit. I have a portfolio of long range ... and a portfolio of shorter plays. Today may be a day to buy some shorts ... I have been selling my shorts over the past few weeks.... mainly before CG's go to 25%.....  
You dig the hole .. I fill the hole . 100% employment !
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 9:23 pm

Quoting AGM100 (Reply 17):
mainly before CG's go to 25%....

Ugh, tell me about it. It sounds like you know what you're doing, though. One common problem with many inexperienced investors is that they buy in when they hear all the good news about how high the market is going, but this is often towards market peaks. Then they panic and sell when it falls off a cliff. This just makes things worse.
Why grab a Heine when you can grab a Busch?
 
ua777222
Topic Author
Posts: 2987
Joined: Mon Dec 22, 2003 11:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Tue May 04, 2010 10:58 pm

DOW -2.02% (-225) to close just under 11K.
"It wasn't raining when Noah built the ark."
 
einsteinboricua
Posts: 4705
Joined: Thu Apr 15, 2010 4:11 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Wed May 05, 2010 1:56 pm

Well, let's look at it this way: travels to Europe should be cheaper!l 
"You haven't seen a tree until you've seen its shadow from the sky."
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Wed May 05, 2010 4:59 pm

Quoting newark777 (Reply 18):
Ugh, tell me about it.

Kind of makes investing a bad deal all the way around when you must make say minimum 30%+ to make long term even worth doing. I mean how many portfolios long or short net 30-40% ? to cover? If the G ...is taking 25% even 20% not sure why we even do it . May as well put it in a bank and get 3% and be happy...

I am not very good , but I enjoy strudying and reading about companies and products ... so it kinda fits. But I will be honest I just cant get optomistic ... I want too .. I really try hard to be optomistic but its a day to day struggle now.
You dig the hole .. I fill the hole . 100% employment !
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Wed May 05, 2010 5:31 pm

Quoting AGM100 (Reply 21):

Kind of makes investing a bad deal all the way around when you must make say minimum 30%+ to make long term even worth doing. I mean how many portfolios long or short net 30-40% ?

Although it is a significant increase, the tax is still only on increases to the tax basis, so you aren't going to go from a profit to a loss because of the CG tax. It just makes any profits you make smaller. There are many tax equivalent yield calculators available online where you can plug in the different variables to determine what securities are more worthwhile. These are usually used to determine whether you should invest in munis vs. commercial bonds, but you can take the formulas and apply them to this as well.

Quoting AGM100 (Reply 21):
I am not very good , but I enjoy strudying and reading about companies and products ... so it kinda fits. But I will be honest I just cant get optomistic ... I want too .. I really try hard to be optomistic but its a day to day struggle now.

Many people are in the same boat. Best advice is just not to panic and make any irrational decisions. Know when to hold em and know when to fold em. As long as you have your portfolio diversified to your desired risk level (growth, income, security, etc.), you'll be ok in the long run.
Why grab a Heine when you can grab a Busch?
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Wed May 05, 2010 6:09 pm

Quoting newark777 (Reply 22):
There are many tax equivalent yield calculators available online where you can plug in the different variables to determine what securities are more worthwhile.

Good advise again ... we have more tools available to us then we know.

Quoting newark777 (Reply 22):
Best advice is just not to panic and make any irrational decisions. Know when to hold em and know when to fold em. As long as you have your portfolio diversified to your desired risk level (growth, income, security, etc.), you'll be ok in the long run.

With all of the information available now in my opinion it can be a double edge sword. When you can go online and instantly see that your BRK.B holdings have been downgraded to neutral , split and are falling ...it makes the hold a little tougher. But you are right , you have to keep perspective and remember why you bought the stock in the first place.
You dig the hole .. I fill the hole . 100% employment !
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Wed May 05, 2010 7:18 pm

Quoting AGM100 (Reply 23):

With all of the information available now in my opinion it can be a double edge sword. When you can go online and instantly see that your BRK.B holdings have been downgraded to neutral , split and are falling ...it makes the hold a little tougher. But you are right , you have to keep perspective and remember why you bought the stock in the first place.

I've heard some financial advisors advise clients NOT to look at day to day performance of stocks for this very reason. People tend to have itchy trigger fingers.

But even then, let's say you have 30% of your portfolio in equity securities. Assuming you are properly diversified, even if Berkshire Hathaway goes bankrupt, you shouldn't lost more than 1% of the portfolio's total value.
Why grab a Heine when you can grab a Busch?
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Wed May 05, 2010 8:28 pm

Quoting newark777 (Reply 24):
People tend to have itchy trigger fingers.

Its a natural reaction .... back to the old saying dont gamble what you dont mind losing.
You dig the hole .. I fill the hole . 100% employment !
 
User avatar
Pellegrine
Posts: 1828
Joined: Thu Mar 29, 2007 10:19 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 7:01 am

Quoting Aaron747 (Reply 2):

Still small potatoes to what would happen with a run on the Japanese yen. Public debt is now at somewhere in the neighborhood of 190% of GDP, second only to Zimbabwe.

What does this have to do with anything? The JPY is still a world reserve currency. People run to Yen in the time of turmoil, not the way around. Maybe this will change in the future, but until then...

The current USD strength is temporary. If Greece didn't pull down the Euro, it would be closer to 1.37500-1.42500 vs. the USD. If Greece is taken care of and Spain et al. don't **** up, the Euro should be back over 1.33 or so in due time. But, there is always no telling currencies are always volatile (usually).
oh boy, here we go!!!
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 4:24 pm

   US sending $45 Billion to the IMF ? ..... STOP. If the reports are currect the US gives 17% of the IMF total budget ... China gives 2.7 % . WSJ has report today on Chinas action to have more control on the IMF .... but hey step up with the cash before you start pushing buttons .

Seems to me Greece suffers from the disease of big government spending into a black hole .... the people send the money in ,the politicians spend it like 5 year olds in a candy store and it all goes to shit. Worse still ... the system can not recover because you have a country full of unionized dependent minded people.

Freemarket .,.. not perfect but it can recover with tough hard working independent people who are not used to relying on the community!.
You dig the hole .. I fill the hole . 100% employment !
 
MadameConcorde
Posts: 9201
Joined: Fri Feb 23, 2007 5:08 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 7:20 pm

05/06/2010 Wall Street falls sharply again.

http://www.google.com/finance?client=ob&q=INDEXDJX:.DJI

10,474.53
-393.59 (-3.62%)

DJ really went down today to about -900 and higher and then it went up again.
The Plunge Protection Team was probably hard at work.

 

Must follow this the next coming days. I think it might get really interesting.
There was a better way to fly it was called Concorde
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 7:28 pm

Quoting MadameConcorde (Reply 28):
Must follow this the next coming days. I think it might get really interesting.

This may be nothing other than a computerized reaction to a "fat finger" print for a trade on Proctor & Gamble. Same thing happened with Apple stock, printing trades at artificially low levels.

Not all trades are reported from exchange trading, some of them come directly from market makers. When I used to trade "off-board", my other side would report straight to the ticker.

The coincidence and timing, though, is striking.
International Homo of Mystery
 
MadameConcorde
Posts: 9201
Joined: Fri Feb 23, 2007 5:08 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 8:43 pm

Thank you. I found this on another forum.
I wonder if this was manipulated to bring the DJ index down or if it was really an error.

????

Errant Trade May Have Caused Market Plunge: Sources

http://www.nytimes.com/reuters/2010/...us-market-selloff.html?ref=reuters

NEW YORK (Reuters) - The biggest intraday point drop ever in the Dow Jones Industrial Average may have been caused by an erroneous trade entered by a person at a big Wall Street bank, multiple market sources said on Thursday.

     
There was a better way to fly it was called Concorde
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 8:45 pm

Quoting AGM100 (Reply 17):
I have been selling my shorts over the past few weeks....

  

Quoting AeroWesty (Reply 29):
The coincidence and timing, though, is striking.

Sure is ... lots of bad news leading the coverage on it. But I tend to believe that it was some kind of lag or event that triggered the sell off. I guess I am looking to buy now ... some I have been watching are down 6-7% in just one day.
You dig the hole .. I fill the hole . 100% employment !
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 8:51 pm

Quoting AeroWesty (Reply 29):

This may be nothing other than a computerized reaction to a "fat finger" print for a trade on Proctor & Gamble. Same thing happened with Apple stock, printing trades at artificially low levels.

Word is someone entered a $16 billion sell order instead of $16 million on equities futures contracts at the CME. Oops.

Once the shares dropped, some black box trading also contributed to the continued decline. There was a lot of panicking going on this afternoon; very scary for a while there.

Quoting MadameConcorde (Reply 30):
I wonder if this was manipulated to bring the DJ index down

Unlikely. And even if it fell even more, it can't be "brought down," since there are circuit breakers in place to stop trading at certain percentage drops to be able to sort out what is going on.
Why grab a Heine when you can grab a Busch?
 
User avatar
N328KF
Posts: 5810
Joined: Tue May 25, 2004 3:50 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 8:52 pm

Quoting MadameConcorde (Reply 30):
NEW YORK (Reuters) - The biggest intraday point drop ever in the Dow Jones Industrial Average may have been caused by an erroneous trade entered by a person at a big Wall Street bank, multiple market sources said on Thursday.

Yup. It appears to be Citigroup.

Also, Accenture's stock went from $42 down to $0.01 up to $41. Oh, to have been eyeing that stock at the right time!
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 8:57 pm

The NYSE CEO was just on CNBC and he's discounting the fat finger scenario. There'd been a "take a breather" for 60-90 seconds on a few stocks when electronic trading systems continued to look for liquidity and found it. I didn't catch the whole reason, but he thinks the P&G trade might be reversed.

Bottom line from his message though was that Friday morning is going to be "ugly" in the markets regardless the reason behind today's temporary oversell.
International Homo of Mystery
 
PSA53
Posts: 2928
Joined: Tue Aug 19, 2003 1:54 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 9:00 pm

Tuesday's Off! Do not disturb.
 
User avatar
N328KF
Posts: 5810
Joined: Tue May 25, 2004 3:50 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 9:02 pm

Quoting AeroWesty (Reply 34):
The NYSE CEO was just on CNBC and he's discounting the fat finger scenario.

Of course. The NYSE execs don't want to risk any chance of the US or French goverments (remember, NYSE is Franco-American now) adding regulation to automated trading.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
ua777222
Topic Author
Posts: 2987
Joined: Mon Dec 22, 2003 11:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 9:10 pm

Take a trip somewhere dark or far away. Tomorrow is going to be crazy.
"It wasn't raining when Noah built the ark."
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 9:15 pm

Quoting N328KF (Reply 36):
The NYSE execs don't want to risk any chance of the US or French goverments (remember, NYSE is Franco-American now) adding regulation to automated trading.

I don't see how that would be any advantage to the NYSE. They initiated the slowdown themselves, and other trading sources decided not to go along with it.
International Homo of Mystery
 
ua777222
Topic Author
Posts: 2987
Joined: Mon Dec 22, 2003 11:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 9:17 pm

Priceless.

I don't think its fair to call a time-out and then say "wow, that didn't work out, hit the undo button..."
"It wasn't raining when Noah built the ark."
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 9:29 pm

When I looked at a simple time/price/volume chart for P&G (should have looked at this earlier), it doesn't look like a fat finger at all, but a simple case of selling into existing bids, and during the slowdown on the NYSE, trades took place at the next level where bids were available.

http://finance.yahoo.com/echarts?s=P...ues=0;logscale=on;source=undefined

As one of my old colleagues used to say, sometimes it does pay off to have GTC buy orders in well below the market, you never know when someone may hit your bid!
International Homo of Mystery
 
MadameConcorde
Posts: 9201
Joined: Fri Feb 23, 2007 5:08 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 9:30 pm

Quoting ua777222 (Reply 37):
Take a trip somewhere dark or far away. Tomorrow is going to be crazy.

I have been thinking the same way although I think the Plunge Protection Team will be hard at work and any sharp drop will be corrected again some way or other.

No one other than anarchists really wants to see a market total crash.    
There was a better way to fly it was called Concorde
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 10:27 pm

Quoting N328KF (Reply 33):
Also, Accenture's stock went from $42 down to $0.01 up to $41.

There were several stocks that fell to basically $0.

Quoting AeroWesty (Reply 34):
There'd been a "take a breather" for 60-90 seconds on a few stocks when electronic trading systems continued to look for liquidity and found it. I didn't catch the whole reason, but he thinks the P&G trade might be reversed.

I heard someone mention that they may void stocks above or below 60% of the pre-2:40 price.

EDIT: As I type that, NASDAQ announced they are doing exactly that, voiding the trades.

[Edited 2010-05-06 15:28:19]
Why grab a Heine when you can grab a Busch?
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Thu May 06, 2010 10:55 pm

Quoting newark777 (Reply 42):
I heard someone mention that they may void stocks above or below 60% of the pre-2:40 price.

As a former broker, and still active investor, I wouldn't have a problem with that for the shares that traded at 1¢ (clearly anomalies), but the P&G trades looked very much like orderly electronic trading into a valid market when you look at the time/price/volume record (they only traded as low as off 37% today).

For any stock, there are only going to be so many shares being bid for by institutions and the general public, which is why there's a specialist on the exchanges, to maintain liquidity. If I had had a GTC bid in at 50% of the market price, and it was hit in good faith, I'd expect the trade to go through. That's how an auction market works.

This will be interesting to watch in terms of if any precedents are set and which trades end up being busted for what reasons.
International Homo of Mystery
 
Newark777
Posts: 8284
Joined: Thu Dec 02, 2004 6:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Fri May 07, 2010 12:14 am

Quoting AeroWesty (Reply 43):

I interned at a specialist firm back in college, and I can tell you, I am glad I was not there today, and I'm glad I didn't have to work late tonight cleaning this mess up. I also agree, the PG situation looks like a separate occurrence from the shares that hit $0.

Quoting AeroWesty (Reply 43):

This will be interesting to watch in terms of if any precedents are set and which trades end up being busted for what reasons.

I'm also interested to see what exactly caused the dozen or so shares to bottom out in that 2:40-3 o'clock range. Very strange.
Why grab a Heine when you can grab a Busch?
 
User avatar
RayChuang
Posts: 8007
Joined: Sat Jun 24, 2000 7:43 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Fri May 07, 2010 4:51 am

Today's totally insane trading session (I felt like I just rode the Millenium Force roller coaster at Cedar Point amusement park!    ) is more proof the SEC needs to bump up the minimum margin requirements for futures and index trades to 15% from the current 5%. That was just insane and scary!
 
MadameConcorde
Posts: 9201
Joined: Fri Feb 23, 2007 5:08 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Fri May 07, 2010 10:47 am

Looks like the markets in the Far East are taking their turn. Wehre is their Plunge Portection Team?

Asian markets tumble across the board
By Justine Lau in Hong Kong
Published: May 7 2010 06:28 | Last updated: May 7 2010 06:28

Asian stocks fell across the board on Friday as the Greek debt crisis and a sharp fall in US shares overnight triggered a massive sell off.

http://www.ft.com/cms/s/57ca7916-598...1010832%3Btopicseen&nclick_check=1

Crude oil is down on pre market trading today

http://money.cnn.com/data/premarket/index.html

Looks like this is another interesting day.


   Wow!  

MARKET DATA - 11:47 UK
FTSE 100
5233.47down
-27.52 -0.52%
Dax
5868.01down
-40.25 -0.68%
Cac 40
3514.21down
-41.90 -1.18%
Dow Jones
10520.32down
-347.80 -3.20%
Nasdaq
2319.64down
-82.65 -3.44%
BBC Global 30
5610.69up
29.18 0.52%

[Edited 2010-05-07 03:50:44]
There was a better way to fly it was called Concorde
 
MadameConcorde
Posts: 9201
Joined: Fri Feb 23, 2007 5:08 pm

RE: Dow Dives As Dollar Gains, Thanks Greece!

Fri May 07, 2010 4:28 pm

Markets Overview

* Dow
-18.81 / -0.18%
10,501.51
* Nasdaq
-17.85 / -0.77%
2,301.79
* S&P
-3.04 / -0.27%
1,125.11


Stocks tumble anew
May 07 10:39am:

The selloff resumed Friday as investors remained jittery following one of the most gut-churning days in Wall Street history. More

http://money.cnn.com/data/markets/
There was a better way to fly it was called Concorde
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Fri May 07, 2010 5:57 pm

All this round and round .... here is the simple question .

Who believes that the leftist policies of increased government control of our economy ...increased etitlement spending and increased tax burden bodes well for investors in the future?. I have said before that the future may belong to the liberals ... what does that look like ?

Will the US flatten out to become more like a western EU economy ... taking away the risk venture profits that fuel the US stock market ?
You dig the hole .. I fill the hole . 100% employment !
 
ua777222
Topic Author
Posts: 2987
Joined: Mon Dec 22, 2003 11:23 am

RE: Dow Dives As Dollar Gains, Thanks Greece!

Sat May 08, 2010 8:22 am

Quoting AGM100 (Reply 48):
All this round and round .... here is the simple question .

  ^  ^  ^  ^  ^  ^  ^  
"It wasn't raining when Noah built the ark."

Who is online

Users browsing this forum: rfields5421, Tugger and 18 guests